Strategic priorities

Business review

In 2014, our Licensing business focused on diversifying and growing our customer base globally. We also signed a number of strategic deals which enriched our competitive offering, including cloud-based navigation and location services, a pedestrian-friendly map layer, and an indoor mapping offering.

Through customer collaborations and partnerships we have expanded our map products to address new use cases such as pedestrian and indoor navigation. TomTom customers are now able to develop apps and location-based services, which help users to navigate with ease, both in and out of the car.

We extended our location-based services product portfolio with the addition of an online turn-by-turn navigation service. This service enables mobile device customers and web service providers to offer online mapping and navigation applications that do not require an offline map. The new service is also well-suited for products in the emerging wearables category.

We extended our partnership with AOL's MapQuest, giving its users access to TomTom's map database, across all digital platforms including MapQuest.com and its iOS and Android smartphone and tablet apps. We announced a multi-year deal with Acer to bring TomTom turn-by-turn navigation technology to new Acer smartphones with the launch of a new navigation application called 'AcerNAV'. The app enables users to navigate anywhere in the world, without extra roaming charges, with the ability to download any TomTom map for free. We also announced a partnership with Intel and Opening Ceremony to power the MICA, 'My Intelligent Communication Accessory' bracelets with location-based services and real-time location information. The real-time location feature provides real-time location information such as estimated times of arrival to precise locations.

We also built go-to-market capability in emerging markets by creating a dedicated, locally present sales team, further optimising our sales channels.

Financial review

Key figures overview
Excel

(€ in millions, unless stated otherwise)

2014

2013

y.o.y. change1

Revenue2

111.6

116.0

–4%

EBITDA3

30.1

31.1

–3%

EBITDA margin (%)

27%

27%

EBIT

–11.4

–10.9

n.m.

EBIT margin (%)

–10%

–9%

  1. Change percentages are based on non-rounded figures.
  2. Reporting structure for the Licensing business unit was reclassified in 2014. Due to client portfolio redistribution a minor amount of revenue was moved from Licensing to Automotive.
  3. Licensing D&A costs mainly relate to our map asset (including acquisition-related amortisation).

Licensing revenue in 2014 was €112 million, 4% lower compared to last year (2013: €116 million). Licensing generated EBITDA of €30 million in 2014, which translates into an EBITDA margin of 27%, comparable to last year. Licensing EBIT amounted to -€11 million in 2014 (2013: -€11 million). The relatively flat EBIT year on year was due to a modest decline in revenue offset by improved gross margin and lower operating expenses.

Business outlook

We believe that the trends of growing location awareness will provide a wealth of future opportunities, in which TomTom is well positioned to play a role. As more location and navigation services rely on cloud-based technologies, our full suite of location products will be equipped to meet demand. These new business models increasingly rely on fresh map and traffic content, an area where TomTom has proven technology that combines fast cycle times with industry-leading quality standards.

In 2015, we will continue to strengthen our operational effectiveness. In the B2B sector, we aim to drive growth by expanding our customer base for traffic products, through new product introductions and through geographical expansion in emerging markets.